How Winklevoss twins used $11m Facebook payout to become world's first Bitcoin billionaires

The twin brothers who sued Mark Zuckerberg claiming he stole the idea for Facebook are worth more than US$1 billion after capitalising on the astonishing rise in bitcoin.

A US$11 million ($15.9 million) bet on bitcoin made by Tyler and Cameron Winklevoss more than four years ago has ballooned by almost 10,000 per cent after last week's price surge. It is believed to be the first billion-dollar return made by a cryptocurrency investor, a landmark moment for the controversial asset.

Bitcoin hit US$11,395 last week, capping a boom that started a year ago and accelerated dramatically in recent days, despite a chorus of warnings about its threat to financial stability and potential for criminal exploitation.
Tyler Winklevoss, left, and Cameron Winklevoss, have bet heavily on Bitcoin.
RICHARD DREW/AP

The rise has made millionaires out of many of its early backers but the Winklevoss twins are believed to be the first public figures to have turned an investment into more than US$1 billion.

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The pair, who attended Harvard with Zuckerberg, won a US$65 million payout from Facebook in 2008, claiming he had stolen their idea. In March 2013, they used US$11 million of the settlement to buy roughly 1 per cent of the world's supply of bitcoin in March 2013, when one coin was worth around US$120.

The hoard has not been disclosed but is estimated to be around 100,000 bitcoins – worth more than US$1 billion at the cryptocurrency's peak last week.

Since their clash with Facebook, the twins – who rowed for the US at the Beijing Olympics – have restyled themselves as Bitcoin entrepreneurs, launching their own online exchange and venture capital fund. The pair are believed to have held onto their bitcoin investments in the hope of launching an exchange-traded fund in New York, although they have struggled to gain approval from financial regulators.

"We've never sold a bitcoin, we're in it for the long haul," Cameron Winklevoss said two years ago. Tyler Winklevoss, who has said the currency could be worth trillions, told London's The Daily Telegraph last year that Bitcoin was "like a better version of gold". A spokesman for the twins did not respond to requests for comment.

Only a handful of bitcoin wallets have holdings worth more than US$1 billion, including the cryptocurrency's mysterious inventor, who has never been unmasked and is known only by the online pseudonym Satoshi Nakamoto. The Winklevoss twins are the most high profile of its big backers.

Bitcoin, which is not backed by any central bank but maintained by a network of its users, hit an all-time high last week despite Lloyd Blankfein, the chief executive of Goldman Sachs, joining other financial heavyweights in dismissing it as a fraud. The Federal Reserve also issued a warning that it could pose a risk to financial stability.

"While these digital currencies may not pose major concerns at their current levels of use, more serious financial stability issues may result if they achieve wide-scale usage," Fed governor Randal Quarles said.

Last week the Chicago Mercantile Exchange won approval to launch Bitcoin futures trading and plans to offer contracts later this month. The move is seen as a mark of legitimacy that could boost institutional interest in the virtual currency and boosted its price.

However, the cryptocurrency is still largely unregulated. The British government is seeking to bring virtual currency exchanges into money-laundering regulation under proposed amendments to EU legislation in the coming weeks.

* Enforce Border Security – America should be guarding her own borders and enforcing her own laws instead of policing the world and implementing UN mandates.

* No Amnesty - The Obama Administration’s endorsement of so-called “Comprehensive Immigration Reform,” granting amnesty to millions of illegal immigrants, will only encourage more law-breaking.

* Abolish the Welfare State – Taxpayers cannot continue to pay the high costs to sustain this powerful incentive for illegal immigration. As Milton Friedman famously said, you can’t have open borders and a welfare state.

* End Birthright Citizenship – As long as illegal immigrants know their children born here will be granted U.S. citizenship, we’ll never be able to control our immigration problem.

No matter what the future holds for bitcoin, can't help but think this has the makings of a mania right now.

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No matter what the future holds for bitcoin, can't help but think this has the makings of a mania right now.

It does look like one.

should that scare you away from experimenting with crypto currencies ? Be ready when the price goes back down.. But honestly this bubble can go up to 40k and fall back to 20k.. What then? Put 1% right now and another 1% of your worth after next crash.

lol compare this to me. i have 90% of my networth in Bitcoin. It is a HUGE bet but god I will be rich. And you are afraid to put 1%?

but i bought on FOMO pumping back in .... 2013 bubble... In hindsight best EVER buy i will ever make.

Now you need to spend more, in order to take full advantage of this opportunity. The 12,000,000(pesos?) you've already made is nothing compared to the future potential of this revolutionary technology.

Now you need to spend more, in order to take full advantage of this opportunity. The 12,000,000(pesos?) you've already made is nothing compared to the future potential of this revolutionary technology.

the day you prove me ownership of one bitcoin (with a private key signature). that day will be the time to sell. You are the typical contrarian indicator.

"Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

"Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

No matter what the future holds for bitcoin, can't help but think this has the makings of a mania right now.

It is in stage 0.5 out of 10 of the "mania"

When there is a real bitcoin mania, it will be in the tens of millions or hundreds of millions of dollars.

There will only be about 21 million bitcoins made, ever.. that is about the size of a large city.. no way everybody can afford to buy a single coin, or even 1/100th of a coin when there is a real 'mania'.

And the mania won't be a bad thing, it will mean in the end of fiat currencies as we know it.

"Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

"Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

They might own a lot of satoshis one day, but by the time they get convinced the value will be so high a single bitcoin will be out of 99.999% of people's reach to afford.

If that is the case, by then expect bitcoin to have been completely nationalized as an e-dollar, regulated and declared gold-backed. Then, gold holders could trade in their gold ozs at a 1oz=1btc rate. I suspect at that point many physical gold holders would be way ahead of recent bitcoin buyers

It's much more likely that bitcoin will be banned and a national gold-backed cryptocurrency declared legal tender instead. Why would anyone give a $#@! about bitcoin at that point? It would be an old, slow, outdated dinosaur compared to the banker's approved crypto.

Last edited by devil21; 12-06-2017 at 12:21 PM.

"Let it not be said that we did nothing." - Ron Paul

The entire internet is the domain of paid shills and bots. If you don't know this by now....

Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

It's much more likely that bitcoin will be banned and a national gold-backed cryptocurrency declared legal tender instead. Why would anyone give a $#@! about bitcoin at that point? It would be an old, slow, outdated dinosaur compared to the banker's approved crypto.

I don't understand why you anti-bitcoin people always act like there is only one country in the entire world.

"Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

"Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

I don't understand why you anti-bitcoin people always act like there is only one country in the entire world.

Actually, it is you guys that fall to see the bigger picture of how blockchain based systems are already set to operate. Y'all spend so much time thinking about how "rich" you'll be (which is a joke since $100k bitcoin means bread is $20 a loaf...purchasing power is maintained but you'll be "rich" like Zimbabweans were "rich"...no diff than metal holders when price discovery stops being suppressed) that you don't bother to research WHAT IS ALREADY DECIDED BY THE GLOBALISTS as to how the global blockchain system will operate.

I'll give you a clue because I'm a nice guy. It will be concentric circles of blockchain currencies, similar to token ring network operation. US will have a local blockchain based currency. China will have theirs. And many other countries will have theirs, all denominated in the standard local currency unit. Those local blockchain currencies (e-dollar, e-yuan, etc) will interact with the global blockchain SDR (see 1988 Economist cover). The local ones declared gold-backed to lend credibility and the SDR including gold into the basket to maintain the gold link.

So, are you claiming that bitcoin will be the global SDR blockchain? If not, then bitcoin will have no place in their infrastructure, though you and others will be thanked for your help publicizing their new system for them so they didn't have to do it. You'll show those money-changers who's boss! It doesn't take a rocket scientist to see what's really going on here.

"Let it not be said that we did nothing." - Ron Paul

The entire internet is the domain of paid shills and bots. If you don't know this by now....

Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

Actually, it is you guys that fall to see the bigger picture of how blockchain based systems are already set to operate. Y'all spend so much time thinking about how "rich" you'll be (which is a joke since $100k bitcoin means bread is $20 a loaf...purchasing power is maintained but you'll be "rich" like Zimbabweans were "rich"...no diff than metal holders when price discovery stops being suppressed) that you don't bother to research WHAT IS ALREADY DECIDED BY THE GLOBALISTS as to how the global blockchain system will operate.

I'll give you a clue because I'm a nice guy. It will be concentric circles of blockchain currencies, similar to token ring network operation. US will have a local blockchain based currency. China will have theirs. And many other countries will have theirs, all denominated in the standard local currency unit. Those local blockchain currencies (e-dollar, e-yuan, etc) will interact with the global blockchain SDR (see 1988 Economist cover). The local ones declared gold-backed to lend credibility and the SDR including gold into the basket to maintain the gold link.

So, are you claiming that bitcoin will be the global SDR blockchain? If not, then bitcoin will have no place in their infrastructure, though you and others will be thanked for your help publicizing their new system for them so they didn't have to do it. You'll show those money-changers who's boss! It doesn't take a rocket scientist to see what's really going on here.

$100k bitcoin does not mean $20 for a loaf of bread, neither does $1 mil bitcoin, it could be the same price for a loaf of bread but bitcoin has a greater demand relative to other currencies and assets.

BTC could go up to $1 mil without any significant inflation, then let's say there is massive hyper-inflation - at that point, yes, bitcoin could go up to $10 mil or $100 mil due to inflation, at which point goods and services would be more expensive.. bitcoin certainly will withstand inflation of the dollar, but that is not why it goes up. That is generally why gold goes up, but if gold became more widely used as a currency or for backing currency then gold could see higher demand as well.

"Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

"Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

$100k bitcoin does not mean $20 for a loaf of bread, neither does $1 mil bitcoin, it could be the same price for a loaf of bread but bitcoin has a greater demand relative to other currencies and assets.

BTC could go up to $1 mil without any significant inflation, then let's say there is massive hyper-inflation - at that point, yes, bitcoin could go up to $10 mil or $100 mil due to inflation, at which point goods and services would be more expensive.. bitcoin certainly will withstand inflation of the dollar, but that is not why it goes up. That is generally why gold goes up, but if gold became more widely used as a currency or for backing currency then gold could see higher demand as well.

That's all great except the part where bitcoin will be the Myspace of blockchain and no one will care what the value is because it will be regulated into the ground and won't be used.

"Let it not be said that we did nothing." - Ron Paul

The entire internet is the domain of paid shills and bots. If you don't know this by now....

Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

I'm a small investor in Bitcoin and I like the idea. I hope it will become the standard around the world mainly because of the privacy part. That said I do see a problem that's hardly worth mentioning since if this "problem" happens we have more to worry about than bitcoin.

I'm talking a total collapse of the power grid and destruction of electronics from either an EMP or from sun activity. If all electronic communication die where do your bitcoins go?? Of course if you have them in your private wallet on your memory card stored in a Faraday cage you will still "have" them but you won't be able to use them. For most people they will simply be gone in the ether (mine included).

So I don't bother to worry about this "problem" since if it happens I'll be busy worrying about how I'm going to get my next meal...

Actually, it is you guys that fall to see the bigger picture of how blockchain based systems are already set to operate. Y'all spend so much time thinking about how "rich" you'll be (which is a joke since $100k bitcoin means bread is $20 a loaf...purchasing power is maintained but you'll be "rich" like Zimbabweans were "rich"...no diff than metal holders when price discovery stops being suppressed) that you don't bother to research WHAT IS ALREADY DECIDED BY THE GLOBALISTS as to how the global blockchain system will operate.

I'll give you a clue because I'm a nice guy. It will be concentric circles of blockchain currencies, similar to token ring network operation. US will have a local blockchain based currency. China will have theirs. And many other countries will have theirs, all denominated in the standard local currency unit. Those local blockchain currencies (e-dollar, e-yuan, etc) will interact with the global blockchain SDR (see 1988 Economist cover). The local ones declared gold-backed to lend credibility and the SDR including gold into the basket to maintain the gold link.

So, are you claiming that bitcoin will be the global SDR blockchain? If not, then bitcoin will have no place in their infrastructure, though you and others will be thanked for your help publicizing their new system for them so they didn't have to do it. You'll show those money-changers who's boss! It doesn't take a rocket scientist to see what's really going on here.

1% of a $50k American salary sure does buy a lot in Croatia and other crappy Balkan countries, doesn't it? A quick review shows that rents in Croatia vary from (exchange rate) $200USD to $400USD per month. Getting one dumb American to put $5000 into bitcoin can pay your rent for a year.

Last edited by devil21; 12-07-2017 at 06:21 AM.

"Let it not be said that we did nothing." - Ron Paul

The entire internet is the domain of paid shills and bots. If you don't know this by now....

Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

Talk to people about liberty. You won't find it on websites, you won't find it in politicians.